Can an Ex-Employee Authorize Someone to Collect Gratuity Due to Medical Reasons?

Gratuity Application Query

I want to clear a doubt regarding the application for gratuity. One of our ex-employees, who completed 5 years at the time of resignation, has forwarded her request for gratuity via email. She informed us that due to some medical reasons, she will not be able to come in person to apply for the same and will authorize someone to collect it.

However, our company policy states that employees eligible for gratuity need to come in person to our office and complete the formalities for the payment of gratuity. Our policy doesn't permit any third person for this.

I would like to know if, as per law, a third party, if authorized, can complete the formalities of payment of gratuity on behalf of an employee unless in the case of death.

Seniors, kindly advise.

Regards,
Anna

No, only in the case of the death of the employee can the nominee of the deceased claim gratuity. In other cases, such practices are not allowed. The concerned employee is required to fulfill all formalities and make a written request for claiming the gratuity amount from your company.

Regards

Gratuity Payment and Authorization

The Payment of Gratuity Act does not state that the beneficiary must come in person to complete the formalities. It's dependent on the organization's policy, but I believe that if the beneficiary has a very genuine and valid reason, the organization should accommodate this and can make the payment (handing over the a/c payee cheque) to any authorized person. Yes, the authorization needs to be proper.

If an employee has not claimed the gratuity in Form I, it does not absolve the employer from the responsibility to pay gratuity. The employer is bound to make the payment within the specified time prescribed in the act. Even a signed and scanned copy of Form I sent through email is sufficient to process the application.

Regards,
Kamal

Thank you for your immediate reply. I have one more doubt that I would like to clarify. If she decides to pursue a legal case stating that the company has not taken into consideration her medical condition, which prevents her from traveling to the office and completing the formalities, what would be the legal stance in this scenario?

Regards,
Anna

Do you think it is legal to delay or deny someone gratuity benefits on the grounds that the employee is not coming in person to fulfill the formalities? Please do not give confusing and wrong advice. Your advice may create future legal issues for the employer.

Review the Payment of Gratuity Act

I would suggest going through the Payment of Gratuity Act thoroughly and also reviewing several case decisions/laws of High Courts and the Supreme Court on related matters.

Gratuity Benefits: A Statutory Right

Gratuity benefits are a statutory and protected right of an employee and cannot be mixed up or manipulated with your organization's policies.

Employer's Legal Responsibility

It is the legal responsibility of the employer to pay the gratuity within 30 days of an employee leaving the establishment. Even when the employee is untraceable, it is the duty of the employer to trace them. If the employer fails to trace the employee, they should deposit the amount of gratuity with the appropriate authority under the Payment of Gratuity Act. Failing this, the employer has to pay interest at 12% from the date on which the gratuity became due, i.e., 30 days after the employee's leaving.

Regards, Kamal P

Anna George, please read Section 7 of the POG Act. The employer shall pay gratuity to the employee even if she has not applied for it. In your case, you can pay by cheque to the authorized person. However, to be safer, you should inform the Controlling Authority about the payment.

Regards,
Varghese Mathew